Project success indicators
Key Non-Financial Performance Indicators (KPIs)
These metrics allow us to evaluate the qualitative aspects of the project:
Customer satisfaction : Can be measured through surveys, reviews, or NPS (Net Promoter Score).
Quality of a product or service : defect rate, number of returns, uptime.
Innovativeness : the number of new mexico whatsapp number technologies or processes introduced.
Environmental friendliness : CO2 emissions, volume of waste recycled.
Social impact : number of jobs created, contribution to local community development.
For example, for a project to launch a new line of eco-friendly packaging, KPIs might include the percentage of biodegradable materials in the composition, reduction of plastic waste, and customer satisfaction with the new product.
Financial indicators of the project
These indicators give a clear idea of the financial side of the project:
Return on investment (ROI): the ratio of profit received to the funds invested.
Marginality: the percentage of profit in revenue.
Break-even point: the sales volume at which revenues equal expenses.
Operating profit: income after deducting operating expenses.
Current ratio: the ability to pay off short-term liabilities.
Project success indicators
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For example, for a startup in the field of online education, important financial and economic indicators may be average revenue per user, cost of customer acquisition, and retention rate of paying students.
Dynamic indicators
These indicators take into account the change in the value of money over time:
Net Present Value (NPV) : The difference between the present value of future income and expenses.
Internal Rate of Return (IRR) : The interest rate at which the NPV is zero.
Discounted payback period : The time it takes to recoup an investment, taking into account the cost of money.
Return on Investment (PI) : The ratio of the present value of future cash flows to the initial investment.
For example, when evaluating a solar power plant construction project, dynamic indicators can help take into account the long-term outlook, including changes in electricity prices and equipment maintenance costs.
Summary table of important indicators for assessing the success of a project
Category Indicator Description Example of target value
Non-financial Customer Satisfaction NPS (Net Promoter Score) > 50
Product quality Percentage of defects < 2%
Innovativeness Number of new technologies ≥ 3 per year
Financial ROI Return on investment > 15%
Marginality Percentage of profit in revenue > 25%
Break even Sales volume to cover expenses < 6 months
Dynamic NPV Net Present Value > 1,000,000 RUB.
IRR Internal rate of return > 20%
PI Profitability index > 1.5
This table serves as a starting point for a comprehensive assessment of the project. It is important to adapt the indicators and their target values to the specifics of your particular business venture.
Calculation of the integral indicator of project success (NPV, IRR)
For a comprehensive assessment of a project, a combination of NPV (net present value) and IRR (internal rate of return) is often used. These indicators provide a comprehensive picture of the financial attractiveness of the investment.
Calculation example:
Let's say we have a project to launch an online platform for teaching foreign languages. The initial investment is 5,000,000 rubles, and the projected cash flows for the next 5 years look like this:
Year 1 : RUB 1,000,000
Year 2 : RUB 2,000,000
Year 3 : RUB 3,000,000
Year 4 : RUB 3,500,000
Year 5 : RUB 4,000,000
Discount rate - 10%
NPV = -5,000,000 + 1,000,000/(1,1)^1 + 2,000,000/(1,1)^2 + 3,000,000/(1,1)^3 + 3,500,000/(1, 1)^4 + 4,000,000/(1,1)^5 = 4,306 414 rub.
A positive NPV value indicates that the project will increase the value of the company.
To calculate IRR, you need to solve the equation:
-5,000,000 + 1,000,000/(1+IRR)^1 + 2,000,000/(1+IRR)^2 + 3,000,000/(1+IRR)^3 + 3,500,000/(1+IRR) ^4 + 4,000,000/(1+IRR)^5 = 0
The IRR in this case will be approximately 32.6%.
This means that the project provides a return of 32.6%, which is significantly higher than the discount rate of 10%.